This paper studies the joint impact of exporting and abatement on the environmental performance of Chinese manufacturers. For two common air pollutants (SO2 and industrial dust) we document that (a) exporters are significantly less emissions-intensive relative to their nonexporting counterparts and (b) this difference cannot be explained by differential rates of abatement alone. Employing variation in trade and environmental conditions across time and space, we quantify the impact of endogenous export and abatement decisions on firm-level emissions. We find that exporting reduces emissions by at least 36% across pollutants. We explore underlying determinants of export-driven reductions in emissions intensity.

Firms’ success in international markets depends on their product’s quality, prices, markups, and marginal cost. However, causally identified empirical evidence for the effect of trade policies that address nontariff barriers on these mechanisms is rare. To fill this gap, we exploit a quasinatural experiment in Denmark and examine the effects of an export support policy aimed at reducing nontariff barriers to trade. We find that export support raises firm-level exports within markets. However, export support does not affect prices, quality, markups, or marginal costs. Instead, the results support trade theory predicting that firms grow in export markets by shifting demand.